The new Income-tax Act has 283 fewer sections. And your ERP team may still have a lot to do. The Income-tax Act, 2025 has 536 sections, compared with 819 under the 1961 Act. That is a significant simplification on paper.
But tax compliance does not happen on paper. It happens inside payroll systems, TDS masters, ERP tax codes, vendor classifications, reports, return-generation logic. And suddenly, a change that looks simple in the Act becomes a system-change exercise.
Take TDS. The old Act had multiple TDS provisions across Sections 192 to 194T. The new Act consolidates these broadly into Sections 392 and 393, with structured tables for different categories of payments.
For a tax professional, that may be easier to navigate. For a business system, every mapping still needs to be right. And this is where the transition gets interesting.
For payments from 1 April 2026, the new Act applies. The Income Tax Department has specifically cautioned that using old section numbers such as 194C or 194J for new transactions may trigger system-level validation errors.
So the question for CFOs is not just: “Have we understood the new law?” It is: “Have our systems understood it?”
Because a simpler tax law can still create a complicated implementation problem.
